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Goff: Algiers business lunch, Algieria

Phil Goff

17 January, 2008
Speech at Algiers business lunch, Algieria

Minister of Commerce, Monsieur Lachemi Djaaboub

President of the Algiers Chamber of Commerce and Industry, M. Brahim Bendjaber

Distinguished guests, ladies and gentlemen

I am very pleased to be here today. This is my first visit to Algiers and the first visit to Algeria by a New Zealand Cabinet Minister for nearly a decade.

I would like to acknowledge the New Zealand business representatives, Rahim Rahal, Richard Fowel, Faisal Saifullah and Aziz Ferhat that have joined me on this visit from Tait Electronics, 4RF, and Fonterra.

And, I would like to thank our Algerian business guests that have joined us today.

I look forward to hearing from President Bendjaber about the current status of the Algerian economy.

I would like to tell you a little about the New Zealand economy.

New Zealand is a country of just over four million people in the South Pacific.

We are more than 25 hours flying time from Algeria but despite our distance from the world, we are an active participant in international trade and politics. The older generation of New Zealanders are, of course, very familiar with North Africa from the campaigns of the Second World War.

We are a young country – just over 160 years old. Today we have migrants from many parts of the world including the Pacific, Europe and Asia.

The national characteristics of New Zealanders reflect our history, and our geography in many ways.

For example, we have a reputation for finding practical solutions to problems. If a New Zealander doesn’t have the right tools to do the job, he or she will make them. Or think of a new way to get the job done.

We have an entrepreneurial spirit – in fact measured by the rate of business ownership, New Zealand is the most entrepreneurial country in the world.

Agriculture is the backbone, and we have a deserved reputation for high quality and efficiently produced foods and beverage from an industry, which competes on the world market without any subsidies.

Our geography and our need to be able to compete on the international market has seen New Zealand lead the way in many of the key innovations that shape the international agricultural trade today.

The New Zealand economy remains primarily agriculturally focused and, though the prices have not been as high as those for oil, international agricultural commodity prices – particularly in the dairy sector – and our leadership in innovation and agricultural technology have underpinned continued economic prosperity in the last few years.

But we also innovate in other fields beyond agriculture. It was a New Zealander - Ernest Rutherford - for example, who first split the atom. It was also a kiwi – Alan McDiarmid - who co-discovered conductive polymers – plastic materials that conduct electricity.

Today, many New Zealand businesses have developed international reputations for innovators in other “new economy” fields, such as information and communication technologies, aerospace, education and the creative industries.

Two of the New Zealand firms that are here today are excellent examples of this.
- 4RF has a worldwide reach, with regional offices in Asia, Africa, the Middle East, Europe, Latin America and the US.
- It provides carrier-class digital microwave radio, which provides fast, cost-effective and efficient wireless communications.
- It is currently deployed in over 92 countries and has over 130 networks worldwide.
- Its products can reach distances of over 150 km point-to-point. A key advantage of using thes products is that they effectively minimize the total infrastructure cost of any project.
- 4RF’s world-class products are used with oil and gas, utilities, public safety and military applications.
Tait electronics:
- Is world renowned for its innovation and commitment to producing world-class secure mobile radio communication product solutions, for government, commercial and industrial organisations.
- It has an annual turnover of in the vicinity of US$250 million, and has over 900 staff worldwide.
- It is present in over 140 countries – including Australia, Canada, Singapore, the US, the UK and throughout the Middle East.
- Tait is now beginning to focus on North Africa.
- It is unique in that it tailor-makes specific solutions to fit its customers’ needs.
I will invite each company and Fonterra to give a very brief outline of what they have to offer in Algeria at the end of my comments.
In the manufactured goods market, we don’t seek to compete at the commodity end rather we look to create added value products based on outstanding design, particularly in the automotive, aviation, electronics, engineering, marine and plastics industries.
We have also worked hard to create a business-friendly regulatory framework and economic infrastructure.

Organisations such as the Heritage Foundation has rated New Zealand as one of the top five countries in its 2007 Index of Economic Freedom and the Wall Street Journal as one of the top five in its Global Entrepreneurship Monitor.

The World Bank consistently rates New Zealand in the top two countries in its annual “Ease of Doing Business” survey.

And in the international survey on transparency and freedom from corruption, conducted by Transparency International, New Zealand is ranked first equal.

We have strong economic fundamentals. Since 2000, our GDP has grown at a rate well above the OECD average and our unemployment is among the lowest in the OECD.

Annual inflation is currently running at 2.6 per cent, and our central bank is mandated to manage inflation within a band of one to three percent per annum.

And, New Zealand's economy is very open with about 95 percent of imports by value arriving free of tariffs.

Like any country, we of course also face our challenges. For us, distance remains a key factor.

While we have a high rate of business ownership, the vast majority of our businesses are small, comparatively young and are largely focused on the domestic market.

We need to develop more globally competitive firms, and we would like to improve our export performance.

New Zealand is focused on continuing to develop international trading relationships, and continuing to innovate in both traditional and “new economy” sectors.

The New Zealand – Algeria Trade Relationship

New Zealand sees significant potential for growth in its trade relationship with Algeria.

It is very encouraging that the Algeria – New Zealand business relationship – though still relatively small – is growing impressively.

Although from a low base, the relationship has grown impressively in the past year - from NZ$131 to NZ$213 million - a 52% growth from the previous year.

Algeria is now New Zealand’s biggest market in North Africa by volume, and our second largest in Africa overall.

New Zealand agricultural exports, particularly dairy, underpin our current trading relationship.

The dairy sector in the North Africa/Middle East region is showing strong growth, and New Zealand dairy cooperative Fonterra, the world’s biggest dairy exporter, has an established presence in Algeria.

We believe that there is a good foundation for further growth in agricultural trade between New Zealand and Algeria.

A good relationship with the Algerian Government has allowed us to work through some of the challenges we have faced, for example on food safety issues.

And, we are making good progress toward concluding our bilateral negotiations for Algeria’s accession to the World Trade Organisation.

I would like to thank Minister Djaaboub for the role he and his officials have played in progressing these issues.

I believe that there is also significant scope for trade expansion beyond agriculture.

Algeria is in the midst of a programme of major domestic infrastructure investment, which we believe New Zealand firms can provide a high quality contribution to, in partnership with their Algerian counterparts.
So there is plenty of potential to expand our trading relationship, which is still a relatively young one.
We accept that the development of broader political and business relationships is a key to working together. This is why I have given priority to this visit.

The New Zealand – Algeria trading relationship is at present overwhelmingly in one direction – with New Zealand’s agriculture exports dominating our current trade profile.

However, we would like to see more Algerian companies investing in and trading with New Zealand. I believe that there is considerable scope for joint business ventures involving New Zealand companies and Algerian partners.

I hope you will take a close look at what New Zealand has to offer, including through your discussions with the New Zealand Industry representatives that are here with me today: Fonterra; 4RF Communications; and Tait Electronics.

Thank you.


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